Treatment of loss of car

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 May 2012 We sold a car at rs 100000, and its wdv is rs. 102134. what would be the treatment according to companies act 1956.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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15 May 2012 You should reduce the wdv amount from the Schedule of Fixed assets and show rs. 2134 as a loss on sale of Fixed assets in Profit and loss acoount.

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2012 THERE IS NO DEPRICIATION WILL BE CALCULATED?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Great question!

**Treatment of loss on sale of car as per Companies Act, 1956:**

* You have sold the car for ₹1,00,000.
* Its written down value (WDV) is ₹1,02,134.
* So, **loss on sale = WDV - Sale price = ₹2,134**.

### Accounting Treatment:

1. **Remove the asset at WDV from your books:**

```
Accumulated Depreciation A/c Dr (if separately maintained)
Loss on Sale of Asset A/c Dr 2,134
To Car (Fixed Asset) A/c 1,02,134
```

or if only WDV is maintained, simply:

```
Loss on Sale of Asset A/c Dr 2,134
To Car (Fixed Asset) A/c 1,02,134
```

2. **Record the cash received:**

```
Bank / Cash A/c Dr 1,00,000
To Loss on Sale of Asset A/c (for loss) 2,134
To Car (Fixed Asset) A/c 1,02,134
```

(but usually done in two entries: one to remove asset and loss, second to record cash received)

### About Depreciation:

* Since asset is sold during the year, **no further depreciation is charged after the date of sale**.
* Depreciation is charged up to the date of sale only (usually on a pro-rata basis).
* The WDV already includes accumulated depreciation till date of sale.

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So, **you do not calculate depreciation after the sale**. Loss is simply difference between sale price and WDV.

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